The FTSE

[SWP's back]

Saying that, it is disappointing to lose such a large amount money from my pension in such a short period of time after increasing the value of my pension by a considerable amount over the last 6 months.

You've got to feel sorry for the people who are about to collect their pension funds and the losses they have recently suffered.

Not really mate because it’s not like the old days where you purchase an annuity. Most people use flexi drawdown and so it doesn’t matter if the markets are down right now as long term they’ll be back up again.

Also you’ve not “lost” £14k right now, it’s a paper loss only. People only lose money when they crystallise that loss by taking it out. Another reason not to be down.

Quite a few people have said that the absolute worst thing you can do is check the values every day (or even every month) - I check mine roughly every 12 months and I think that’s too frequent tbh.

 

[city2]

The trouble is some people don’t have the opportunity to replace their lost revenue because time is against them.

 

[Kompany Car]

The trouble is some people don’t have the opportunity to replace their lost revenue because time is against them.

Thats why people really need to target a retirement as early as possible and whilst its difficult, invest to retire on that date. If the markets then go out of kilter just before that date, you can still work for a few more years until it recovers.

If you invest to target a retirement at state pension age, then the wiggle room becomes much less and looking at how it keeps increasing you may not be up to working anymore at that age.

 

[hampshireblue]

Not really mate because it’s not like the old days where you purchase an annuity. Most people use flexi drawdown and so it doesn’t matter if the markets are down right now as long term they’ll be back up again.

Also you’ve not “lost” £14k right now, it’s a paper loss only. People only lose money when they crystallise that loss by taking it out. Another reason not to be down.

Quite a few people have said that the absolute worst thing you can do is check the values every day (or even every month) - I check mine roughly every 12 months and I think that’s too frequent tbh.

I agree with all of this. It's also important to use all aspects of flexi-drawdown. Last year I got cold feet over the possibility of Iran and Israel going to war and starting a trade crisis!! I got my IFA to shift some holdings into effectively a cash fund still earning around 5% and my income comes from that for the next 3 years. No need to sell down units that have fallen in the meantime. A good IFA is essential.

 

[SWP's back]

Thats why people really need to target a retirement as early as possible and whilst its difficult, invest to retire on that date. If the markets then go out of kilter just before that date, you can still work for a few more years until it recovers.

If you invest to target a retirement at state pension age, then the wiggle room becomes much less and looking at how it keeps increasing you may not be up to working anymore at that age.

Not wrong but also better to have a diversified portfolio of funds that inversely correlated so that you can drawdown on assets that are in the black rather than crystallise short term equity losses (assuming no one buys an annuity anymore).

One’s retirement date is just when we can start drawing down on a pension (that remains invested) rather than the date you set its value in stone.

 

[Kompany Car]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

 

[SWP's back]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

100% agree. I genuinely think personal financial management should be a mandatory subject at GCSE (or whatever they call it these days).

 

[Corky]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

I am on a DB but I think the AVCs work similar and you only need a couple of hours reading. There are advisors who hold sessions every year for a week or two also, but most people aren't interested in the details until they get to 50+

Someone came to work for me he was 43, he had opted out the DB pension, said it was too late to join. He wasn't even aware of the death in service benefit and had a large family. I showed him he could still get a decent pension and made him join. I was also managed by someone in 2005 who had opted out his DB pension due to the Mayan calendar ending in 2012, he is a director of a national charity now, but you can't help some people.

 

[hampshireblue]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

Spot on-I must stop agreeing with you!!

 

[DenisLawBackHeel74]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

You make a great point. I’ve always managed my investments and consider myself fairly financially educated. I recently changed jobs and had two Aviva pensions that I then moved to Fidelity so I’d have more choice of funds and could manage directly…..after 12 months the new fund choices have delivered around +40% on the portfolio.

 

[Tommy_Catons_Perm]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

I think many people on DC schemes may face difficulties in older age if they arestill trying to manage drawdown. One's mental capacity declines naturally with age and there is a real possibility of dementia. Current pensioners are mostly on DB schemes so don't have this problem.

Fortunately, I have a mix of DB and DC schemes. I plan to drawdown the DC before I become senile and then use the DB. Future generations won't have this choice.

 

[SiMCFC]

What is clear is that the move to defined contribution pensions made by businesses over the last 20 yrs should have been accompanied with financial education for the general population, particularly as regards the management of financial risk and how defined contribution pensions work.

The number of people I see within the company I work for who have never questioned the "default fund", with its exorbitant fees and poor return, or looked at selecting other funds or spreading it across a wider portfolio is frankly unbelievable. This may I add, is in a company where most people hold multiple degrees from Russell Group universities and are chartered with professional institutions, so not your average joe. If they are failing to do it, what chance have others got to make the best out of their pensions ?

It's terrifying how blasé some people are regarding future finances, I understand there is a balance to be had but for example (and I know I'm fairly lucky!)

The Company I work for will double your personal contribution for anything up to 7%, so my 7% becomes 21% plus they pay any associated fees and 4.5 x salary death in service contribution. I spoke quite recently to a couple of our team members about finances as a colleague sadly died and I was absolutely shocked that 3/4 of the lads had never changed the default 4% contribution that is set when you first start, some of these have worked here for 15+ years, no idea how much they have potentially lost over the life of the pension but all bar one seemingly didn't really care that much!

They as you have stated above have left their entire pension in the hands of Aegon to manage, didn't know/care where the money was going. I took some time to overlay the default medium and high risk managed funds just as an example and the high risk has consistently outperformed the medium and also has a lot lower fees. If some had looked into this earlier in their careers they could easily have an extra 100k in their pots on retirement.

 

[Tommy_Catons_Perm]

The British attitudes that pensions are boring and personal finances are private and should not be discussed doesn’t help either. I'm always quite open about things and like to help or advise. The rest of the family doesn’t agree and things often end in arguments as I'm accused of being nosy, boring etc. :(

 

[BrianW]

Young people tend not to give much thought to pensions. Retirement seems a long way off and death is all but unimaginable.

The truth is, your life flies by. You get to retirement a lot quicker than you imagine. And the state pension is fuck all a week. Unless you've bought a house, are mortgage-free, and are prepared to live like a hermit, it's nowhere near enough.

I strongly advise anyone to set aside a bundle for your retirement, even at the cost of attending gigs, going abroad on holiday for three weeks, having a flashy car, whatever. Trust me, you'll thank me when you're retired and flush.

 

[Kompany Car]

I think many people on DC schemes may face difficulties in older age if they arestill trying to manage drawdown. One's mental capacity declines naturally with age and there is a real possibility of dementia. Current pensioners are mostly on DB schemes so don't have this problem.

Fortunately, I have a mix of DB and DC schemes. I plan to drawdown the DC before I become senile and then use the DB. Future generations won't have this choice.

Same boat but more by luck than good management, I have 2 DB schemes, a DC with my current employer and some additional investments. The DB schemes I'm treating as my low risk investment and is enough to give me an OK income from 60 obviously better if I leave them to the default retirement age of 63 and 65. The DC is where I have taken a bit more risk and that will be drawn down and assuming I still can, I will be taking the max tax free. The other investments are back stops just in case everything goes to shit mostly in tax efficient wrappers and AIM (which will probably be left due to the inheritance tax relief).

It will need a bit of planning to figure out what is the best order to take them in as the loss from taking the DB early at 60 is not that much and I would need to live to around my mid 80s for it to have a positive impact on my finances, by which time I'm unlikely to be spending as much.

 

[hampshireblue]

Same boat but more by luck than good management, I have 2 DB schemes, a DC with my current employer and some additional investments. The DB schemes I'm treating as my low risk investment and is enough to give me an OK income from 60 obviously better if I leave them to the default retirement age of 63 and 65. The DC is where I have taken a bit more risk and that will be drawn down and assuming I still can, I will be taking the max tax free. The other investments are back stops just in case everything goes to shit mostly in tax efficient wrappers and AIM (which will probably be left due to the inheritance tax relief).

It will need a bit of planning to figure out what is the best order to take them in as the loss from taking the DB early at 60 is not that much and I would need to live to around my mid 80s for it to have a positive impact on my finances, by which time I'm unlikely to be spending as much.

Give some thought to taking all of the Tax Free Cash. It may be better to leave it invested and also taken over a period of time can keep your tax liability down for several years.

 

[Kompany Car]

Give some thought to taking all of the Tax Free Cash. It may be better to leave it invested and also taken over a period of time can keep your tax liability down for several years.

Absolutely, it depends if I hit the maximum tax free allowance. Once you hit the upper limit of £268,275 tax free I can't see any reason why it would be better leaving it, need to get there first of course.

 

[decmancity]

Young people tend not to give much thought to pensions. Retirement seems a long way off and death is all but unimaginable.

The truth is, your life flies by. You get to retirement a lot quicker than you imagine. And the state pension is fuck all a week. Unless you've bought a house, are mortgage-free, and are prepared to live like a hermit, it's nowhere near enough.

I strongly advise anyone to set aside a bundle for your retirement, even at the cost of attending gigs, going abroad on holiday for three weeks, having a flashy car, whatever. Trust me, you'll thank me when you're retired and flush.

Unfortunate reality for a lot of people I know is that they simply cannot do without that extra money. In some cases if their employer has offered it they have reduced their pension and taken the extra take home, as little as it maybe after tax etc.

Hopefully they can rectify it before it's too late.

I consider myself very on the ball in terms of pensions and investments etc even though my current job restricts me from doing too much sadly. I have about 40% salary going into pension and it's been doing well.

A few in here have mentioned about educating colleagues etc. I've done it before but honestly you then become on the hook in some people's eyes and I got bored of them asking me why they are now 1.4% down for the day and I've cost them money. All the resources in the world are available, if they don't want to change it then good luck to them.

 

[BlueHammer85]

Young people tend not to give much thought to pensions. Retirement seems a long way off and death is all but unimaginable.

The truth is, your life flies by. You get to retirement a lot quicker than you imagine. And the state pension is fuck all a week. Unless you've bought a house, are mortgage-free, and are prepared to live like a hermit, it's nowhere near enough.

I strongly advise anyone to set aside a bundle for your retirement, even at the cost of attending gigs, going abroad on holiday for three weeks, having a flashy car, whatever. Trust me, you'll thank me when you're retired and flush.

• I contribute 6.00% of salary
• 
  My company contributes 11.00% of salary

 

[jrb]

A sell-off in the US stock market gathered steam on Monday, fuelled by rising concern about the cost of the trade war to the world's largest economy.

The S&P 500, which tracks the biggest American companies, fell about 2% in early trade, while the Dow Jones dropped 0.9% and the Nasdaq sank more than 3.5%.

The falls came after President Donald Trump ducked questions about whether the US economy was facing a recession or price rises as a result of tariff moves, while warning instead of a "period of transition".

Stocks fall as Trump warns of US economy trade war 'transition'

New retaliatory tariffs from China targeting some US farm products came into effect on Monday.

www.bbc.co.uk